Exhibit 99.2
Table 1: PG&E Corporation Business Priorities 2007-2011
1. Advance business transformation
2. Provide attractive shareholder returns
3. Increase investment in utility infrastructure
4. Implement an effective energy procurement plan
5. Improve reputation through more effective communications
6. Evaluate the evolving industry and related investment opportunities
Table 2: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Net Income in Accordance with Generally Accepted Accounting Principles (GAAP)
First Quarter 2007 vs. First Quarter 2006
(in millions, except per share amounts)
| Three months ended March 31, | |||||||||||||
Earnings | Earnings per Common Share (Diluted) | ||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||
PG&E Corporation Earnings from Operations 1 | $ | 256 | $ | 214 | $ | 0.71 | $ | 0.60 | |||||
Items Impacting Comparability 2 | - | - | - | - | |||||||||
| PG&E Corporation Earnings on a GAAP basis | $ | 256 | $ | 214 | $ | 0.71 | $ | 0.60 | |||||
1. Earnings from operations exclude items impacting comparability.
2. Items impacting comparability reconcile earnings from operations with consolidated net income as reported in accordance with GAAP. For the periods ended March 31, 2007 and 2006, PG&E Corporation did not have any items impacting comparability to report.
Table 3: Reconciliation of Pacific Gas and Electric Company’s Earnings from Operations to Consolidated Net Income in Accordance with GAAP
First Quarter 2007 vs. First Quarter 2006
(in millions)
Three months ended March 31, | |||||||
| Earnings | |||||||
| 2007 | 2006 | ||||||
Pacific Gas and Electric Company Earnings from Operations 1 | $ | 258 | $ | 214 | |||
Items Impacting Comparability 2 | - | - | |||||
| Pacific Gas and Electric Company Earnings on a GAAP basis | $ | 258 | $ | 214 | |||
1. Earnings from operations exclude items impacting comparability.
2. Items impacting comparability reconcile earnings from operations with consolidated net income as reported in accordance with GAAP. For the periods ended March 31, 2007 and 2006, Pacific Gas and Electric Company did not have any items impacting comparability to report.
Table 4: PG&E Corporation Earnings per Common Share from Operations
First Quarter 2007 vs. First Quarter 2006
($/Share, Diluted)
Q1 2006 EPS from Operations 1 | $ | 0.60 | ||
| Rate base revenue increases | 0.07 | |||
Storm expenses 2 | 0.02 | |||
| Environmental remediation | (0.01 | ) | ||
| Miscellaneous items | 0.03 | |||
Q1 2007 EPS from Operations 1 | $ | 0.71 | ||
1. See Table 2 for a reconciliation of earnings per common share (diluted), or EPS, from operations to EPS on a GAAP basis.
2. Cost incurred in 2006 with no similar cost in 2007.
Table 5: PG&E Corporation Share Statistics
First Quarter 2007 vs. First Quarter 2006
(shares in millions, except per share amounts)
First Quarter 2007 | First Quarter 2006 | % Change | ||||||||
| Common Stock Data | ||||||||||
Book Value per share - end of period 1 | $ | 21.60 | $ | 20.14 | 7.25 | % | ||||
| Weighted average common shares outstanding, basic | 349 | 344 | 1.45 | % | ||||||
| Employee share-based compensation and accelerated share repurchase program | 2 | 5 | (60.00 | %) | ||||||
| Weighted average common shares outstanding, diluted | 351 | 349 | 0.57 | % | ||||||
| 9.5% Convertible Subordinated Notes (participating securities) | 19 | 19 | - | |||||||
| Weighted average common shares outstanding and participating securities, diluted | 370 | 368 | 0.54 | % | ||||||
1. Common shareholders’ equity per common share outstanding at period end.
Source: PG&E Corporation’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 6: Operational Performance Metrics
First Quarter Actual 2007 vs. Targets 2007
2007 | |||||
Percentage Weight 1 | Q1 Actual | Q1 Target | EOY Target | ||
1. | Earnings from operations (in millions) (Earnings from ongoing core operations) | 50% | $256 | N/A 2 | N/A 2 |
2. | J.D. Power Customer Satisfaction Index (Composite of J.D. Power residential and business customer surveys) | 20% | 700 | 673 | 676 |
3. | Business Transformation Performance (Composite of five Transformation metrics) | 20% | 1.0 | 1.0 | 1.0 |
4. | Employee Satisfaction Survey (Measurement of employee engagement at PG&E) | 5% | N/A 3 | N/A 3 | 66% |
5. | Safety Performance (Measurement of occupational injury or illness based on OSHA Recordables) | 5% | 4.183 | 4.066 | 4.500 |
1. Represents weighting used in calculating PG&E Corporation Short-Term Incentive Plan performance for management employees.
2. Internal target is not publicly disclosed but is consistent with PG&E Corporation’s publicly disclosed guidance for 2007 EPS from operations of $2.70 - $2.80.
3. Annual survey results will be available in December 2007.
DEFINITIONS OF 2007 OPERATIONAL PERFORMANCE METRICS FROM TABLE 6:
| 1. | Earnings from Operations: |
Earnings from operations measures PG&E Corporation’s earnings power from ongoing core operations. It allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations (items impacting comparability). The measurement is not in accordance with GAAP. For a reconciliation of earnings from operations to consolidated net income in accordance with GAAP, see Table 2 above. The 2007 target for earnings from operations is based on the Utility’s 2007 authorized return on equity. This target is not publicly reported but is consistent with PG&E Corporation’s publicly disclosed guidance range provided for 2007 EPS from operations of $2.70-$2.80. | |
| 2. | J.D. Power Customer Satisfaction Index: |
| PG&E measures residential and business customer satisfaction with annual industry-wide surveys conducted by J.D. Power and Associates, as well as with proprietary studies using the same survey in interim quarters. The overall customer satisfaction metric represents the year-to-date average of the residential and business overall customer satisfaction scores from both the J.D. Powers-administered and proprietary surveys. The metric is calculated by first combining the available residential and business satisfaction scores (weighted 60% and 40%, respectively) in each quarter and then averaging all available quarterly composite scores for the year-to-date metric value. | |
| 3. | Business Transformation Performance: |
The Business Transformation (BT) index is comprised of five measurement points that define success in achieving key BT operational, financial, and post-BT implementation objectives. These five measurement points are: a. Overall BT cost performance in comparison to budgeted amounts; b. Overall BT benefit performance in comparison to planned/budgeted amounts; c. New business customer connection performance improvement for cycle time and number of customer commitments met; d. SmartMeterTM project performance for number of meters installed and activated; and e. BT Foundational release schedule and scope success. The measurement points are individually scored on an index scaled from 0 to 2. These scores then are averaged with equal weighting to give the overall BT performance index score. | |
| 4. | Employee Satisfaction Survey: |
| The employee satisfaction survey is designed around 15 key drivers of employee engagement. The average overall employee satisfaction score provides a comprehensive metric that is derived by averaging the percent favorable responses from all 40 core survey items (all fall into one of the 15 key drivers). | |
| 5. | Safety Performance |
| An OSHA Recordable is an occupational (job-related) injury or illness that requires medical treatment beyond first aid, or results in work restrictions, death, or loss of consciousness. The OSHA Recordable Rate is the number of OSHA Recordables per 200,000 hours worked (a rule of thumb is that the OSHA Recordable Rate represents the number of OSHA Recordables per year for every 100 employees). | |
Table 7: Pacific Gas and Electric Company Operating Statistics
First Quarter 2007 vs. First Quarter 2006
| Three Months Ended March 31, | |||||||
| 2007 | 2006 | ||||||
| Electric Sales (in millions kWh) | |||||||
| Residential | 7,966 | 7,741 | |||||
| Commercial | 7,894 | 7,806 | |||||
| Industrial | 3,376 | 3,634 | |||||
| Agricultural | 625 | 525 | |||||
| BART, public street and highway lighting | 206 | 205 | |||||
| Other electric utilities | 1 | 3 | |||||
| Sales from Energy Deliveries | 20,068 | 19,914 | |||||
| Total Electric Customers at March 31 | 5,080,745 | 5,025,303 | |||||
| Bundled Gas Sales (in millions MCF) | |||||||
| Residential | 87 | 79 | |||||
| Commercial | 25 | 25 | |||||
| Total Bundled Gas Sales | 112 | 104 | |||||
| Transportation Only | 143 | 115 | |||||
| Total Gas Sales | 255 | 219 | |||||
| Total Gas Customers at March 31 | 4,248,338 | 4,201,151 | |||||
| Sources of Electric Energy (in millions kWh) | |||||||
| Utility Generation | |||||||
| Nuclear | 4,909 | 4,805 | |||||
| Hydro (net) | 2,143 | 3,738 | |||||
| Fossil | 125 | 266 | |||||
| Total Utility Generation | 7,177 | 8,809 | |||||
| Purchased Power | |||||||
| Qualifying Facilities | 3,869 | 3,590 | |||||
| Irrigation Districts | 612 | 1,655 | |||||
| Other Purchased Power | 169 | 206 | |||||
| Spot Market Purchases, net | 2,671 | 37 | |||||
| Total Purchased Power (1) | 7,321 | 5,488 | |||||
| Delivery from DWR | 5,290 | 4,796 | |||||
| Delivery to Direct Access Customers | 1,676 | 1,981 | |||||
| Others (includes energy loss) | (1,396 | ) | (1,160 | ) | |||
| Total Electric Energy Delivered | 20,068 | 19,914 | |||||
| Diablo Canyon Performance | |||||||
| Overall capacity factor (including refuelings) | 102 | % | 103 | % | |||
| Refueling outage period | None | None | |||||
| Refueling outage duration during the period (days) | - | - | |||||
1. Total Purchased Power is net of Spot Market Sales of 733 million kWh and 2,468 million kWh for the three months ended March 31, 2007 and 2006, respectively.
Table 8: PG&E Corporation EPS Guidance
2007 EPS Guidance
| Low | High | ||||||
EPS Guidance on an Earnings from Operations Basis | $ | 2.70 | $ | 2.80 | |||
Estimated Items Impacting Comparability | �� | $ | 0.00 | $ | 0.00 | ||
EPS Guidance on a GAAP Basis | $ | 2.70 | $ | 2.80 | |||
2008 EPS Guidance
| Low | High | ||||||
EPS Guidance on an Earnings from Operations Basis | $ | 2.90 | $ | 3.00 | |||
Estimated Items Impacting Comparability | $ | 0.00 | $ | 0.00 | |||
EPS Guidance on a GAAP Basis | $ | 2.90 | $ | 3.00 | |||
DISCUSSION RELATED TO TABLES 8, 9, and 10:
Management's statements regarding 2007 and 2008 guidance for earnings from operations per common share for PG&E Corporation, estimated rate base for 2007 and 2008, and general sensitivities for 2007 and 2008 earnings, constitute forward-looking statements that are based on current expectations and assumptions which management believes are reasonable, including that the Utility earns its authorized rate of return. These statements and assumptions are necessarily subject to various risks and uncertainties. Actual results may differ materially. Factors that could cause actual results to differ materially include:
| · | the Utility’s ability to timely recover costs through rates; |
| · | the outcome of regulatory proceedings, including ratemaking proceedings pending at the CPUC and the FERC; |
| · | the adequacy and price of electricity and natural gas supplies, and the ability of the Utility to manage and respond to the volatility of the electricity and natural gas markets; |
| · | the effect of weather, storms, earthquakes, fires, floods, disease, other natural disasters, explosions, accidents, mechanical breakdowns, acts of terrorism, and other events or hazards on the Utility’s facilities and operations, its customers and third parties on which the Utility relies; |
| · | the potential impacts of climate change on the Utility’s electricity and natural gas businesses; |
| · | changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions, changes in technology including the development of alternative energy sources, or other reasons; |
| · | operating performance of the Utility’s Diablo Canyon nuclear generating facilities (“Diablo Canyon”) the occurrence of unplanned outages at Diablo Canyon, or the temporary or permanent cessation of operations at Diablo Canyon; |
| · | the ability of the Utility to recognize benefits from its initiatives to improve its business processes and customer service; |
| · | the ability of the Utility to timely complete its planned capital investment projects; |
| · | the impact of changes in federal or state laws, or their interpretation, on energy policy and the regulation of utilities and their holding companies; |
| · | the impact of changing wholesale electric or gas market rules, including new rules of the California Independent System Operator (“CAISO”) to restructure the California wholesale electricity market; |
| · | how the CPUC administers the conditions imposed on PG&E Corporation when it became the Utility’s holding company; |
| · | the extent to which PG&E Corporation or the Utility incur costs and liabilities in connection with pending litigation that are not recoverable through rates, from third parties, or through insurance recoveries; |
| · | the ability of PG&E Corporation and/or the Utility to access capital markets and other sources of credit; |
| · | the impact of environmental laws and regulations and the costs of compliance and remediation; |
| · | the effect of municipalization, direct access, community choice aggregation, or other forms of bypass; and |
| · | other risks and factors disclosed in PG&E Corporation’s and Pacific Gas and Electric Company’s SEC reports. |
Table 9: Rate Base - Pacific Gas and Electric Company
| 2006 | 2007 | 2008 | ||||||||
| Recorded | Estimated | Estimated | ||||||||
| Total Weighted Average Rate Base (in billions) | $ | 15.9 | $ | 17.0 | $ | 18.7 | ||||
The estimates of rate base for 2007 and 2008 and the forecast of capital expenditures on which the estimates are based, are forward-looking statements that are subject to various risks and uncertainties, including whether the forecasted expenditures will be made within the time periods assumed. Actual results may differ materially. For a discussion of the factors that may affect future results, see the factors listed in Table 8, the discussion of risk factors in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, and the discussion of risk factors in PG&E Corporation's and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2006.
Table 10: General Earnings Sensitivities for 2007 and 2008
PG&E Corporation and Pacific Gas and Electric Company
| Variable | Description of Change | Estimated Earnings Impact for 2007 | Estimated Earnings Impact for 2008 | |||
| Rate base | +/- $100 million change in rate base 1 | +/- $6 million | +/- $6 million | |||
| Return on equity (ROE) | +/- 0.1% change in earned ROE | +/- $9 million | +/- $10 million | |||
| Share count | +/- 1% change in average shares outstanding | -/+ $0.03 per share | -/+ $0.03 per share | |||
| Revenues | +/- $7 million change in revenues (pre-tax), including Electric Transmission and California Gas Transmission | +/- $0.01 per share | +/- $0.01 per share |
1. Assumes earning 11.35% on equity portion (52%).
These general earnings sensitivities that may affect 2007 and 2008 earnings are forward-looking statements that are based on various assumptions that may prove to be inaccurate. Actual results may differ materially. For a discussion of the factors that may affect future results, see the factors listed in Table 8, the discussion of risk factors in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, and the discussion of risk factors in PG&E Corporation's and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2006.
Table 11: Cash Flow Sources and Uses
Year-to-Date 2007
PG&E Corporation
(in millions)
| Cash and Cash Equivalents, December 31, 2006 | $ | 456 | ||
| Sources of Cash | ||||
| Cash from operations | $ | 976 | ||
| Net proceeds from sale of assets | 4 | |||
| Net proceeds from issuance of long-term debt | 690 | |||
| Common stock issued | 26 | |||
| Other | 26 | |||
| $ | 1,722 | |||
| Uses of Cash | ||||
| Capital expenditures | 673 | |||
| Increase in restricted cash | 11 | |||
| Investments in and proceeds from nuclear decommissioning trust, net | 18 | |||
| Net repayments under credit facilities | 300 | |||
| Net repayment of commercial paper | 425 | |||
| Rate reduction bonds matured | 75 | |||
| Energy recovery bonds matured | 83 | |||
| Common stock dividends paid | 123 | |||
| 1,708 | ||||
| Cash and Cash Equivalents, March 31, 2007 | $ | 470 |
Source: PG&E Corporation’s Condensed Consolidated Statements of Cash Flows included in PG&E Corporation’s and Pacific Gas and Electric Company’s combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 12: PG&E Corporation’s and Pacific Gas and Electric Company’s Consolidated Cash Position
First Quarter 2007 vs. First Quarter 2006
(in millions)
| 2007 | 2006 | Change | ||||||||
| Cash Flow from Operating Activities (YTD March 31) | ||||||||||
| PG&E Corporation | $ | 2 | $ | 35 | $ | (33 | ) | |||
| Pacific Gas and Electric Company | 974 | 1,094 | (120 | ) | ||||||
| $ | 976 | $ | 1,129 | $ | (153 | ) | ||||
| Consolidated Cash Balance (at March 31) | ||||||||||
| PG&E Corporation | $ | 433 | $ | 299 | $ | 134 | ||||
| Pacific Gas and Electric Company | 37 | 604 | (567 | ) | ||||||
| $ | 470 | $ | 903 | $ | (433 | ) | ||||
| Consolidated Restricted Cash Balance (at March 31) | ||||||||||
| PG&E Corporation | $ | - | $ | - | $ | - | ||||
Pacific Gas and Electric Company 1 | 1,443 | 1,494 | (51 | ) | ||||||
| $ | 1,443 | $ | 1,494 | $ | (51 | ) | ||||
1. Includes $17 million of restricted cash classified as Other Noncurrent Assets - Other in 2007.
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company’s combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and Form 10-Q for the quarter ended March 31, 2006.
Table 13: PG&E Corporation’s and Pacific Gas and Electric Company’s Long-Term Debt
First Quarter 2007 vs. Year End 2006
(in millions)
Balance At | |||||||
March 31, 2007 | December 31, 2006 | ||||||
PG&E Corporation | |||||||
| Convertible subordinated notes, 9.50%, due 2010 | $ | 280 | $ | 280 | |||
Less: current portion 1 | (280 | ) | (280 | ) | |||
| - | - | ||||||
Utility | |||||||
| Senior notes: | |||||||
| 3.60% to 6.05% bonds, due 2009-2037 | 5,800 | 5,100 | |||||
| Unamortized discount, net of premium | (20 | ) | (16 | ) | |||
| Total senior notes | 5,780 | 5,084 | |||||
Pollution control bond loan agreements, variable rates 2, due 2026 3 | 614 | 614 | |||||
| Pollution control bond loan agreement, 5.35%, due 2016 | 200 | 200 | |||||
Pollution control bond loan agreements, 3.50%, due 2023 4 | 345 | 345 | |||||
Pollution control bond loan agreements, variable rates 5, due 2016-2026 | 454 | 454 | |||||
| Other | - | 1 | |||||
| Less: current portion | - | (1 | ) | ||||
| Long-term debt, net of current portion | 7,393 | 6,697 | |||||
Total consolidated long-term debt, net of current portion | $ | 7,393 | $ | 6,697 | |||
| 1. | The holders of Convertible Subordinated notes have a one-time right to require PG&E Corporation to repurchase the Convertible Subordinated Notes on June 30, 2007, at a purchase price equal to the principal amount plus accrued and unpaid interest (including liquidated damages and unpaid “pass-through dividends”, if any). |
| 2. | At March 31, 2007, interest rates on these loans ranged from 3.66% to 3.75%. |
3. | These bonds are supported by $620 million of letters of credit which expire on February 24, 2012. Although the stated maturity date is 2026, the bonds will remain outstanding only if the Utility extends or replaces the letters of credit. |
| 4. | These bonds are subject to a mandatory tender for purchase on June 1, 2007 and the interest rates for these bonds are set until that date. |
| 5. | At March 31, 2007, interest rates on these loans ranged from 3.30% to 3.59%. |
Table 14: PG&E Corporation and Pacific Gas and Electric Company Repayment Schedule and Interest Rates - Long-Term Debt, Rate Reduction Bonds and Energy Recovery Bonds as of March 31, 2007
(in millions, except interest rates)
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | |||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||||
PG&E Corporation | |||||||||||||||||||||||||
| Average fixed interest rate | 9.50% | - | - | - | - | - | 9.50% | ||||||||||||||||||
| Fixed rate obligations | $ | 280 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 280 | |||||||||||
Utility | |||||||||||||||||||||||||
| Average fixed interest rate | - | - | 3.60 | % | - | 4.20 | % | 5.58 | % | 5.29 | % | ||||||||||||||
| Fixed rate obligations | $ | - | $ | - | $ | 600 | $ | - | $ | 500 | $ | 5,225 | $ | 6,325 | |||||||||||
| Variable interest rate as of March 31, 2007 | 3.60 | % | 3.60 | % | |||||||||||||||||||||
| Variable rate obligations | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1,068 | $ | 1,068 | |||||||||||
| Less: current portion | $ | (280) | 1 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (280 | ) | |||||||||
Total consolidated long-term debt | $ | - | $ | - | $ | 600 | $ | - | $ | 500 | $ | 6,293 | $ | 7,393 | |||||||||||
| 1. | The holders of the $280 million 9.50% Convertible Subordinated Notes have a one-time right to require PG&E Corporation to repurchase the Convertible Subordinated Notes on June 30, 2007, at a purchase price equal to the principal amount plus accrued and unpaid interest (including liquidated damages and unpaid “pass-through dividends,” if any). |
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | ||||||||||||||||
Utility | ||||||||||||||||||||||
| Average fixed interest rate | 6.48% | - | - | - | - | - | 6.48% | |||||||||||||||
| Rate reduction bonds | $ | 215 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 215 | ||||||||
| Average fixed interest rate | 4.18 | % | 4.19 | % | 4.36 | % | 4.49 | % | 4.61 | % | 4.64 | % | 4.43 | % | ||||||||
| Energy recovery bonds | $ | 256 | $ | 354 | $ | 370 | $ | 386 | $ | 424 | $ | 403 | $ | 2,193 | ||||||||
Table 15: Pacific Gas and Electric Company
Docket Numbers of Selected Regulatory Cases
| Name | Brief Description | Docket Number |
2007 General Rate Case (2007 GRC) | Final decision was issued on March 15, 2007. | A.05-12-002 D.07-03-044 |
| Gas Accord IV | CPUC proceeding to set rates, terms and conditions for gas transmission and storage services effective January 1, 2008 through 2010. Settlement filed on March 15, 2007. Final decision expected by year-end 2007. | A. 07-03-012 |
2006 Long Term Procurement Plan (2006 LTPP) | CPUC proceeding to determine need for new generation in the 10-year period 2007 through 2016. Also determines how costs associated with new generation will be recovered from customers. In 2006 plan, PG&E seeks approval to procure up to 2300 MW of new generation. Final decision expected by year-end 2007. | R.06-02-013 |
| Billing and Collection Investigation | CPUC investigation into past billing and collection practices. Final decision expected by mid-year 2007. | I.03-01-012 |
| QF Pricing and Policy | CPUC rulemaking proceeding considering various policy and pricing issues related to power purchased from Qualifying Facilities. Final decision expected by third quarter 2007. | R.04-04-003 |
Transmission Owner 9 Rate Case (TO9) | Primary FERC rate-making proceeding to determine electric transmission revenues and wholesale and retail transmission rates effective March 1, 2007. Settlement filed February 2007. Final decision expected May 2007. | ER06-1325-000 |
| 2007 Renewable Resources Solicitation and Implementation | 2007 Renewable Portfolio Standards solicitation approved in February 2007. Expect contracts to be executed by year-end 2007. A decision on the use of short-term contracts is expected by mid-year 2007. | R.06-05-027 D.07-02-011 R.06-02-012 |
| Energy Efficiency Order Instituting Rulemaking (OIR) Post-2005 | Rulemaking to determine Energy Efficiency policies and programs including shareholder risk/return mechanism. A final decision on shareholder incentives is expected by year-end 2007. | R.06-04-010 |
| Holding Company OIR | Rulemaking to determine the relationship between California energy utilities, and their holding companies and non-regulated affiliates. A final decision adopting revisions to the affiliate rules was issued in December 2006. | R.05-10-030 D.06-12-019 |
For a discussion of these regulatory cases, see PG&E Corporation's and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for the year ended December 31, 2006, and PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 16: PG&E Corporation
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(Unaudited) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
Operating Revenues | |||||||
| Electric | $ | 2,175 | $ | 1,863 | |||
| Natural gas | 1,181 | 1,285 | |||||
Total operating revenues | 3,356 | 3,148 | |||||
Operating Expenses | |||||||
| Cost of electricity | 723 | 530 | |||||
| Cost of natural gas | 754 | 873 | |||||
| Operating and maintenance | 920 | 862 | |||||
| Depreciation, amortization, and decommissioning | 430 | 414 | |||||
Total operating expenses | 2,827 | 2,679 | |||||
Operating Income | 529 | 469 | |||||
| Interest income | 52 | 23 | |||||
| Interest expense | (190 | ) | (154 | ) | |||
| Other income, net | 4 | - | |||||
Income Before Income Taxes | 395 | 338 | |||||
| Income tax provision | 139 | 124 | |||||
Net Income | $ | 256 | $ | 214 | |||
Weighted Average Common Shares Outstanding, Basic | 349 | 344 | |||||
Net Earnings Per Common Share, Basic | $ | 0.71 | $ | 0.61 | |||
Net Earnings Per Common Share, Diluted | $ | 0.71 | $ | 0.60 | |||
Dividends Declared Per Common Share | $ | 0.36 | $ | 0.33 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 17: PG&E Corporation
Condensed Consolidated Balance Sheets
(in millions, except share amounts)
Balance At | |||||||
March 31, | |||||||
2007 (Unaudited) | December 31, 2006 | ||||||
ASSETS | |||||||
Current Assets | |||||||
| Cash and cash equivalents | $ | 470 | $ | 456 | |||
| Restricted cash | 1,426 | 1,415 | |||||
| Accounts receivable: | |||||||
| Customers (net of allowance for doubtful accounts of $55 million in 2007 and $50 million in 2006) | 2,108 | 2,343 | |||||
| Regulatory balancing accounts | 895 | 607 | |||||
| Inventories: | |||||||
| Gas stored underground and fuel oil | 95 | 181 | |||||
| Materials and supplies | 160 | 149 | |||||
| Income taxes receivable | 50 | - | |||||
| Prepaid expenses and other | 427 | 716 | |||||
Total current assets | 5,631 | 5,867 | |||||
Property, Plant, and Equipment | |||||||
| Electric | 24,281 | 24,036 | |||||
| Gas | 9,176 | 9,115 | |||||
| Construction work in progress | 1,203 | 1,047 | |||||
| Other | 16 | 16 | |||||
Total property, plant, and equipment | 34,676 | 34,214 | |||||
| Accumulated depreciation | (12,531 | ) | (12,429 | ) | |||
Net property, plant, and equipment | 22,145 | 21,785 | |||||
Other Noncurrent Assets | |||||||
| Regulatory assets | 4,726 | 4,902 | |||||
| Nuclear decommissioning funds | 1,894 | 1,876 | |||||
| Other | 389 | 373 | |||||
Total other noncurrent assets | 7,009 | 7,151 | |||||
TOTAL ASSETS | $ | 34,785 | $ | 34,803 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 17 (continued): PG&E Corporation
Condensed Consolidated Balance Sheets
(in millions, except share amounts)
Balance At | ||||||||||
March 31, | ||||||||||
2007 (Unaudited) | December 31, 2006 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current Liabilities | ||||||||||
| Short-term borrowings | $ | 39 | $ | 759 | ||||||
| Long-term debt, classified as current | 280 | 281 | ||||||||
| Rate reduction bonds, classified as current | 215 | 290 | ||||||||
| Energy recovery bonds, classified as current | 341 | 340 | ||||||||
| Accounts payable: | ||||||||||
| Trade creditors | 805 | 1,075 | ||||||||
| Disputed claims and customer refunds | 1,709 | 1,709 | ||||||||
| Regulatory balancing accounts | 978 | 1,030 | ||||||||
| Other | 531 | 420 | ||||||||
| Interest payable | 550 | 583 | ||||||||
| Income taxes payable | - | 102 | ||||||||
| Deferred income taxes | 188 | 148 | ||||||||
| Other | 1,320 | 1,513 | ||||||||
Total current liabilities | 6,956 | 8,250 | ||||||||
Noncurrent Liabilities | ||||||||||
| Long-term debt | 7,393 | 6,697 | ||||||||
| Energy recovery bonds | 1,852 | 1,936 | ||||||||
| Regulatory liabilities | 3,590 | 3,392 | ||||||||
| Asset retirement obligations | 1,484 | 1,466 | ||||||||
| Income taxes payable | 228 | - | ||||||||
| Deferred income taxes | 2,945 | 2,840 | ||||||||
| Deferred tax credits | 104 | 106 | ||||||||
| Other | 2,004 | 2,053 | ||||||||
Total noncurrent liabilities | 19,600 | 18,490 | ||||||||
Commitments and Contingencies (Notes 2, 4, 5, 10 and 11) | ||||||||||
Preferred Stock of Subsidiaries | 252 | 252 | ||||||||
Preferred Stock | ||||||||||
| Preferred stock, no par value, authorized 80,000,000 shares, $100 par value, authorized 5,000,000 shares, none issued | - | - | ||||||||
Common Shareholders' Equity | ||||||||||
| Common stock, no par value, authorized 800,000,000 shares, issued 374,502,682 common and 1,274,842 restricted shares in 2007 and 372,803,521 common and 1,377,538 restricted shares in 2006 | 5,926 | 5,877 | ||||||||
| Common stock held by subsidiary, at cost, 24,665,500 shares | (718 | ) | (718 | ) | ||||||
| Reinvested earnings | 2,783 | 2,671 | ||||||||
| Accumulated other comprehensive loss | (14 | ) | (19 | ) | ||||||
Total common shareholders' equity | 7,977 | 7,811 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 34,785 | $ | 34,803 | ||||||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 18: PG&E Corporation
Condensed Consolidated Statements of Cash Flows
(in millions)
(Unaudited) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
Cash Flows From Operating Activities | |||||||
| Net income | $ | 256 | $ | 214 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation, amortization, decommissioning and allowance for equity funds used during construction | 454 | 402 | |||||
| Deferred income taxes and tax credits, net | 142 | (30 | ) | ||||
| Other deferred charges and noncurrent liabilities | 68 | 58 | |||||
| Net effect of changes in operating assets and liabilities: | |||||||
| Accounts receivable | 235 | 303 | |||||
| Inventories | 75 | 146 | |||||
| Accounts payable | (86 | ) | (124 | ) | |||
| Accrued taxes/income taxes receivable | 58 | 250 | |||||
| Regulatory balancing accounts, net | (275 | ) | (55 | ) | |||
| Other current assets | 173 | (80 | ) | ||||
| Other current liabilities | (117 | ) | 16 | ||||
| Other | (7 | ) | 29 | ||||
Net cash provided by operating activities | 976 | 1,129 | |||||
Cash Flows From Investing Activities | |||||||
| Capital expenditures | (673 | ) | (576 | ) | |||
| Net proceeds from sale of assets | 4 | 3 | |||||
| Decrease (increase) in restricted cash | (11 | ) | 52 | ||||
| Proceeds from nuclear decommissioning trust sales | 181 | 435 | |||||
| Purchases of nuclear decommissioning trust investments | (199 | ) | (477 | ) | |||
| Other | - | 11 | |||||
Net cash used in investing activities | (698 | ) | (552 | ) | |||
Cash Flows From Financing Activities | |||||||
| Borrowings under accounts receivable facility and working capital facility | - | 50 | |||||
| Repayments under accounts receivable facility and working capital facility | (300 | ) | (310 | ) | |||
| Net repayment of commercial paper, net of $4 million discount on borrowings | (425 | ) | - | ||||
| Proceeds from issuance of long-term debt, net of discount and issuance costs of $10 million in 2007 | 690 | - | |||||
| Rate reduction bonds matured | (75 | ) | (74 | ) | |||
| Energy recovery bonds matured | (83 | ) | (56 | ) | |||
| Common stock issued | 26 | 66 | |||||
| Common stock repurchased | - | (58 | ) | ||||
| Common stock dividends paid | (123 | ) | (114 | ) | |||
| Other | 26 | 109 | |||||
Net cash used in financing activities | (264 | ) | (387 | ) | |||
Net change in cash and cash equivalents | 14 | 190 | |||||
Cash and cash equivalents at January 1 | 456 | 713 | |||||
Cash and cash equivalents at March 31 | $ | 470 | $ | 903 | |||
Table 18 (Continued): PG&E Corporation
Condensed Consolidated Statements of Cash Flows
(in millions)
Supplemental disclosures of cash flow information | |||||||
| Cash paid for: | |||||||
| Interest (net of amounts capitalized) | $ | 128 | $ | 167 | |||
| Income taxes paid (refunded), net | 57 | (103 | ) | ||||
Supplemental disclosures of noncash investing and financing activities | |||||||
| Common stock dividends declared but not yet paid | $ | 126 | $ | 114 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 19: Pacific Gas and Electric Company
Condensed Consolidated Statements of Income
(in millions)
(Unaudited) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
Operating Revenues | |||||||
| Electric | $ | 2,175 | $ | 1,863 | |||
| Natural gas | 1,181 | 1,285 | |||||
Total operating revenues | 3,356 | 3,148 | |||||
Operating Expenses | |||||||
| Cost of electricity | 723 | 530 | |||||
| Cost of natural gas | 754 | 873 | |||||
| Operating and maintenance | 919 | 862 | |||||
| Depreciation, amortization, and decommissioning | 429 | 413 | |||||
Total operating expenses | 2,825 | 2,678 | |||||
Operating Income | 531 | 470 | |||||
| Interest income | 48 | 19 | |||||
| Interest expense | (182 | ) | (146 | ) | |||
| Other income, net | 9 | 6 | |||||
Income Before Income Taxes | 406 | 349 | |||||
| Income tax provision | 145 | 132 | |||||
Net Income | 261 | 217 | |||||
| Preferred stock dividend requirement | 3 | 3 | |||||
Income Available for Common Stock | $ | 258 | $ | 214 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 20: Pacific Gas and Electric Company
Condensed Consolidated Balance Sheets
(in millions, except share amounts)
Balance At | |||||||
March 31, | |||||||
2007 (Unaudited) | December 31, 2006 | ||||||
ASSETS | |||||||
Current Assets | |||||||
| Cash and cash equivalents | $ | 37 | $ | 70 | |||
| Restricted cash | 1,426 | 1,415 | |||||
| Accounts receivable: | |||||||
| Customers (net of allowance for doubtful accounts of $55 million in 2007 and $50 million in 2006) | 2,108 | 2,343 | |||||
| Related parties | 4 | 6 | |||||
| Regulatory balancing accounts | 895 | 607 | |||||
| Inventories: | |||||||
| Gas stored underground and fuel oil | 95 | 181 | |||||
| Materials and supplies | 160 | 149 | |||||
| Income taxes receivable | 25 | 20 | |||||
| Prepaid expenses and other | 422 | 714 | |||||
Total current assets | 5,172 | 5,505 | |||||
Property, Plant and Equipment | |||||||
| Electric | 24,281 | 24,036 | |||||
| Gas | 9,176 | 9,115 | |||||
| Construction work in progress | 1,203 | 1,047 | |||||
Total property, plant and equipment | 34,660 | 34,198 | |||||
| Accumulated depreciation | (12,516 | ) | (12,415 | ) | |||
Net property, plant and equipment | 22,144 | 21,783 | |||||
Other Noncurrent Assets | |||||||
| Regulatory assets | 4,726 | 4,902 | |||||
| Nuclear decommissioning funds | 1,894 | 1,876 | |||||
| Related parties receivable | 26 | 25 | |||||
| Other | 293 | 280 | |||||
Total other noncurrent assets | 6,939 | 7,083 | |||||
TOTAL ASSETS | $ | 34,255 | $ | 34,371 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 20 (continued): Pacific Gas and Electric Company
Condensed Consolidated Balance Sheets
(in millions, except share amounts)
Balance At | |||||||
March 31, | |||||||
2007 (Unaudited) | December 31, 2006 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
| Short-term borrowings | $ | 39 | $ | 759 | |||
| Long-term debt, classified as current | - | 1 | |||||
| Rate reduction bonds, classified as current | 215 | 290 | |||||
| Energy recovery bonds, classified as current | 341 | 340 | |||||
| Accounts payable: | |||||||
| Trade creditors | 805 | 1,075 | |||||
| Disputed claims and customer refunds | 1,709 | 1,709 | |||||
| Related parties | 27 | 40 | |||||
| Regulatory balancing accounts | 978 | 1,030 | |||||
| Other | 513 | 402 | |||||
| Interest payable | 543 | 570 | |||||
| Deferred income taxes | 193 | 118 | |||||
| Other | 1,153 | 1,346 | |||||
Total current liabilities | 6,516 | 7,680 | |||||
Noncurrent Liabilities | |||||||
| Long-term debt | 7,393 | 6,697 | |||||
| Energy recovery bonds | 1,852 | 1,936 | |||||
| Regulatory liabilities | 3,590 | 3,392 | |||||
| Asset retirement obligations | 1,484 | 1,466 | |||||
| Income taxes payable | 99 | - | |||||
| Deferred income taxes | 3,010 | 2,972 | |||||
| Deferred tax credits | 104 | 106 | |||||
| Other | 1,882 | 1,922 | |||||
Total noncurrent liabilities | 19,414 | 18,491 | |||||
Commitments and Contingencies (Notes 2, 4, 5, 10 and 11) | |||||||
Shareholders' Equity | |||||||
| Preferred stock without mandatory redemption provisions: | |||||||
| Nonredeemable, 5.00% to 6.00%, outstanding 5,784,825 shares | 145 | 145 | |||||
| Redeemable, 4.36% to 5.00%, outstanding 4,534,958 shares | 113 | 113 | |||||
| Common stock, $5 par value, authorized 800,000,000 shares, issued 279,624,823 shares | 1,398 | 1,398 | |||||
| Common stock held by subsidiary, at cost, 19,481,213 shares | (475 | ) | (475 | ) | |||
| Additional paid-in capital | 1,832 | 1,822 | |||||
| Reinvested earnings | 5,323 | 5,213 | |||||
| Accumulated other comprehensive loss | (11 | ) | (16 | ) | |||
Total shareholders' equity | 8,325 | 8,200 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 34,255 | $ | 34,371 | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
Table 21: Pacific Gas and Electric Company
Condensed Consolidated Statements of Cash Flows
(in millions)
(Unaudited) | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
Cash Flows From Operating Activities | |||||||
| Net income | $ | 261 | $ | 217 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation, amortization, decommissioning and allowance for equity funds used during construction | 454 | 401 | |||||
| Deferred income taxes and tax credits, net | 143 | (27 | ) | ||||
| Other deferred charges and noncurrent liabilities | 68 | 55 | |||||
| Net effect of changes in operating assets and liabilities: | |||||||
| Accounts receivable | 237 | 303 | |||||
| Inventories | 75 | 146 | |||||
| Accounts payable | (99 | ) | (124 | ) | |||
| Accrued taxes/income taxes receivable | 41 | 202 | |||||
| Regulatory balancing accounts, net | (275 | ) | (55 | ) | |||
| Other current assets | 174 | (80 | ) | ||||
| Other current liabilities | (98 | ) | 41 | ||||
| Other | (7 | ) | 15 | ||||
Net cash provided by operating activities | 974 | 1,094 | |||||
Cash Flows From Investing Activities | |||||||
| Capital expenditures | (673 | ) | (576 | ) | |||
| Net proceeds from sale of assets | 4 | 3 | |||||
| Decrease (increase) in restricted cash | (11 | ) | 52 | ||||
| Proceeds from nuclear decommissioning trust sales | 181 | 435 | |||||
| Purchases of nuclear decommissioning trust investments | (199 | ) | (477 | ) | |||
| Other | - | 11 | |||||
Net cash used in investing activities | (698 | ) | (552 | ) | |||
Cash Flows From Financing Activities | |||||||
| Borrowings under accounts receivable facility and working capital facility | - | 50 | |||||
| Repayments under accounts receivable facility and working capital facility | (300 | ) | (310 | ) | |||
| Net repayment of commercial paper, net of $4 million discount on borrowings | (425 | ) | - | ||||
| Proceeds from issuance of long-term debt, net of discount and issuance costs of $10 million in 2007 | 690 | - | |||||
| Rate reduction bonds matured | (75 | ) | (74 | ) | |||
| Energy recovery bonds matured | (83 | ) | (56 | ) | |||
| Common stock dividends paid | (127 | ) | (115 | ) | |||
| Preferred stock dividends paid | (3 | ) | (3 | ) | |||
| Other | 14 | 107 | |||||
Net cash used in financing activities | (309 | ) | (401 | ) | |||
Net change in cash and cash equivalents | (33 | ) | 141 | ||||
Cash and cash equivalents at January 1 | 70 | 463 | |||||
Cash and cash equivalents at March 31 | $ | 37 | $ | 604 | |||
Table 21 (continued): Pacific Gas and Electric Company
Condensed Consolidated Statements of Cash Flows
(in millions)
Supplemental disclosures of cash flow information | |||||||
| Cash paid for: | |||||||
| Interest (net of amounts capitalized) | $ | 115 | $ | 154 | |||
| Income taxes paid (refunded), net | (30 | ) | (42 | ) | |||
Source: PG&E Corporation’s and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation’s and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.